1:52pm: Before signing off, make sure you catch up on the week that was with Michael Pascoe.

To watch this video, please turn off the auto-refresh.

1:37pm: The Australian dollar hovered close to multi-month highs against its US counterpart, underpinned by a healthy HSBC PMI reading of China's December manufacturing activity.

The Aussie fetched $US1.0536, from $US1.0527 early, having climbed a three-month high of $US1.0585 this week. It was set to post a 0.5 per cent rise for the week.

1:26pm: Here's a snapshot of how blue chip stocks performed today:

BHP: +0.2%

Rio: +0.4%

ANZ: -0.1%

CBA: +0.6%

NAB: flat

Westpac: flat

Fortescue: +1.4%

Woolworths: -0.2%

Wesfarmers: +0.2%

Telstra: -0.2%

1:21pm: Among the sectors, gold miners jumped 1.4 per cent, materials added 0.4 per cent and financials rose just 0.1 per cent. Consumer discretionary shares fell 1.1 per cent and energy lost 0.6 per cent.

1:14pm: The market has closed flat, the S&P/ASX200 added just 0.3 points to 4583.1, while the broader All Ords inched up 2.2 points to 4595.1.

12:54pm: ANZ's delay in passing on the RBA's rate cut has helped the bank net a greater amount through saved interest income than its rivals, BusinessDay's Glenda Kwek notes:

For 2012, ANZ is estimated to have generated about $111 million in additional revenues as it delayed passing on rate cuts following the RBA's four reductions.

According to JPMorgan analyst Scott Manning in a report published in BusinessDay on Monday, each of the major banks ‘‘makes somewhere in the order of $2 million each day that it does not pass on the rate cut’’.

For this month, the bank was estimated to net about $25 million in interest income in passing on the rate cut 17 days after the RBA announcement.

12:35pm:Nine Entertainment made a $972 million loss last financial year ending June 30 as the media group headed for collapse.

In financial reports just released to the corporate regulator, Nine confirmed its dire financial condition at the time with a $783 million write down on the value of its assets last year.

This means the company recorded asset impairments totalling more than $1.5 billion over two years.

12:34pm:GPT Group has said it will pursue a proposal to buy Australand's commercial and industrial assets, as it believes it’s in the best interests of Australand’s and GPT’s security holders.

This was in response to news this morning that Australand had rejected any advances from GPT which lodged an ''indicative'' offer earlier this week.

In a short statement issued this afternoon, GPT says its proposal is in line with its strategy, announced in June 2012, to increase its portfolio exposure to office, logistics and business parks and achieve a more balanced sector weighting.

Recent monthly gains in house prices across most capital cities suggest house prices have passed their floor. Supportive housing demand/supply fundamentals, improved housing affordability and increased housing sales in recent months foreshadow moderate increases in house prices on average in 2013.

Lower house prices and interest rates, combined with rising household incomes have improved housing affordability over the last two years. In the absence of strong growth in house prices, the economic outlook should drive further improvement in housing affordability in 2013.

Dwelling construction remains weak and well below our estimates of underlying housing demand. While recent increases in building approvals suggest we are in the early stages of a cyclical rebound in residential construction, the current cyclical upturn will most likely be subdued compared to previous cycles.

12:03pm:Investors who lost money through the $3 billion collapse of Storm Financial are suing the Bank of Queensland (BoQ) over its role in the group’s demise.

Lawyers acting for the investors filed a statement of claim in the Federal Court on Friday as part of a class action which aims to recoup some of their losses.

The bank said the amount of the claim had not been quantified.

11:39am: ANZ has just announced it will cut its variable interest rate for mortgages by 20 basis, to 6.4 per cent, effective December 21.

Last week, the RBA lowered the official cash rate by 25 basis points to 3 per cent, hitting the record lows last seen during the GFC.

11:30am:Chinese labour arbitrators have ruled against the father of a Foxconn worker brain-damaged in a factory accident in southern China, in a case that puts more attention on the labour practices of Apple Inc's largest contract manufacturer.

The case involves Zhang Tingzhen, a 26-year-old engineer who had nearly half his brain surgically removed after surviving an electric shock in October 2011.

His plight came to light after it was reported that Taiwan firm Foxconn had sent telephone text messages to his family telling them it would cut off funds for his treatment and other expenses if they did not remove him from hospital in Shenzhen city and submit him for a disability assessment 70 km away in Huizhou, where the company says he was hired.

His father, Zhang Guangde, took Foxconn to the arbitration office in October this year insisting that his son was hired in Shenzhen and not Huizhou, where factory wages and compensation levels are substantially lower.

Foxconn has said that wages for engineers are the same in Huizhou and Shenzhen, but since compensation for injuries varies between locations, the company would make up any difference.

In official documents seen on today, the Shenzhen labour dispute arbitration committee ruled against the father. It said the company had produced a contract dated August 4 2011, showing that the young engineer was hired by its Huizhou facility.

11:17am:Google has collated its annual top searches, and among the most popular this year for small business relate to making money, working from home and winding up a business.

11:11am: The dollar has made up a bit of ground thanks to the Chinese PMI data, after falling a third of a US cent overnight.

The dollar rose from $US1.0511 just after noon to a high of $US1.0538 on the news that the HSBC Flash Manufacturing PMI had risen to 50.9, a 14-month high.

Speaking this morning ForexCT head of research Steven Dooley said the Chinese would drive the Australian dollar during the afternoon session but predicted that the focus from now on would be US political discussions about the fiscal cliff.

‘‘Everyone knew that we were going to get some more quantitative easing from the Fed. Once we got that announcement there was no where really left to go. Now quantitative easing is behind us the only real thing for markets to focus on now is the fiscal cliff,’’ he said. It’s going to build to a crescendo at the end of the year.

10:48am: The Motley Fool’s Scott Phillips has been seeking investment advice from an unusual source - William Shakespeare:

Although not a particularly successful investor, the Bard left us with some turns of phrase that investors would do well to embrace. All the glisters is not gold for instance:

"We're tempted to throw caution to the wind and go for the ride. And by the time the market has surrendered to this ‘new truth’, we're ever closer to the painful end. You know what happens next. If it seems too good to be true, it probably is. Since Shakespeare's time, that's been good advice.’’

10:31am: While the market is still trading relatively flat, it did enjoy a slight bump up at 12.45pm, on the news that China's manufacturing sector growth had hit 14-month highs.

10:22am:Macmahon Holdings’ shares have dropped significantly after resuming trade following an $80.7 million capital raising and sale of its construction business.

Shares in the mining contractor were 8.1 per cent lower at 20.50 cents, after earlier sliding as much as 19.3 per cent to 18 cents.

The stock had last traded at 26.5 cents before going into a trading halt on Monday.

Two days later it announced the capital raising, the sale of its construction arm to Leighton Holdings for $16.3 million, and downgraded its full year earnings guidance.

10:03am: CBA economist Michael Workman had some interesting thoughts about the week ahead as we wrap-up for Christmas:

The markets should be in “wind‑down” mode. Data releases are petering out in the run‑up to the Christmas‑New Year break. The only potential problem for financial markets is in the US, where the political impasse continues. Negotiations over the “fiscal cliff”, on past evidence, could exceed the deadlines, causing dislocation and uncertainty in financial markets until a deal is achieved. The Fed chairman, Ben Bernanke, indicated during the week that the Fed will not be able to offset the negative effects on economic growth if negotiations are not successful.

In Australia, the markets will have the RBA December Board minutes to analyse. The reasons for cutting the cash rate in December, to 3.0%, following the no move in November could be illuminating. The ABS will also release updated June quarter population data. Any shift in population growth trends could be important for groups involved in housing markets around the country. Western Australia’s annual population growth is running at 3%, compared to the national figure of 1.4%. The next major data releases will be RBA credit on 31 December followed, in the second week of January, by international trade, retail trade and building approvals.

9:49am: The HSBC Flash Manufacturing PMI, which measures growth in China's manufacturing sector has risen to 50.9, a 14-month high.

A figure above 50 indicates that growth is accelerating, while one below 50 shows slowing growth.

9:35am: Here's a nice feature on speculation surrounding a takeover at Ten Network:

9:23am: An influential Chinese government think tank has warned that the country's economic imbalance has reached an alarming level and urged the government to undertake bold reforms to sustain economic growth.

The Chinese Academy of Social Sciences, a ministry-level research institute and key advisory body, said the index of imbalance hit 0.6173 this year. The index lies between zero and one, with perfect balance at zero and imbalance worsening as it approaches one.

The GST rate has remained at 10 per cent since it was introduced in mid-2000, and fresh food, education and health products are exempt from the consumption tax.But the OECD said the base should be broadened and the rate increased.

In exchange, state taxes should be rationalised, such as reducing or removing conveyance duties, while it says subsidies to first-time buyers should be cut.

8:57am: The Australian government has sold $600 million of July 21, 2017 Treasury bonds.

The Australian Office of Financial Management (AOFM), which conducts bond auctions on behalf of the government, said the bonds were sold for a weighted average yield of 2.84 per cent.

8:06am:The first Test between Australian and Sri Lanka has started in Hobart. The Aussie are batting and Ed Cowen is already back in the pavilion - caught at mid on after miscuing a pull shot. Warner is on 12, Hughes is on 7. Aussies are 1/27.

8:02am:Shares in troubled APN News & Media dived in early trade after the company warned of a dramatic slump in full year earnings.

APN released a trading update after the stock market closed yersterday, warning weak advertising markets would slice its underlying net profit for calendar 2012 by more than a third.

APN, which owns regional newspapers and radio stations across Australia and New Zealand, shares sank by nine per cent in early trade on Friday. The stock was 1.5 cents, or 4.8 per cent, lower at 30 cents a short while ago.

8:00am:CBA hit a new all-time high in early trade - $61.74. That values the company at $99.4 billion. The bank's equities have had a strong year, rising from $47.50 on March 8 to this morning's fresh peak. It has added 25.34 per cent over 2012.

7:52am: The ASX200 and the All Ords are sitting 0.3 per cent higher as we near the end of the first hour of trade. Leads heading into the session were certainly softer than that. RBS Morgans client adviser Bruce Smith said the banks, as well as stocks such as Telstra and Woolworths, were proving attractive to investors given their healthy dividends.

‘‘I think people are stating to get more confident about transitioning their savings out of cash, where they are getting probably almost three per cent now, and putting into stocks like Woolworths, Wesfarmers, the banks and Telstra,’’ Mr Smith said.

‘‘It’s that sentiment of continuing to chase yield and feeling more and more comfortable about having funds invested in those sorts of companies.’’

7:43am: In a couple of hours' time we get HSBC's flash manufacturing PMI for December - 12.45pm to be exact. Arab Bank's David Scutt tweets:

...and there we have it, #XJO in the black. We get a reasonable #PMI print in China & we may just finish the week on a bright note #ausbiz

7:37am:The competition watchdog has approved plans by Qantas to more closely integrate its operations with that of its low-cost airline Jetstar.

In a draft ruling, the Australian Competition and Consumer Commission (ACCC) has approved coordination between Qantas and its Jetstar operations in Australia, Singapore, Vietnam, Japan and yet-to-be-approved venture in Hong Kong on passenger and cargo services.

‘‘The ACCC considers that the coordination is likely to result in public benefits to consumers by increasing the likelihood of additional Jetstar flights and destinations in Asia, and providing increased online connections for consumers,’’ ACCC chairman Rod Sims said in a statement.

Qantas shares are flat in early trade.

7:29am: The worst performed companies on the ASX200 include:

Macmahon Holdings: -12.56%

APN News & Media: -4.76%

Acrux: -3.72%

Goodman Fielder: -2.79%

Fairfax: -2.78%

Lynas: -1.71%

7:27am: Now for the early gainers on the ASX200:

Caltex: +4.07%

Intrepid: +3.92%

Oceanagold: +3.57%

Transpacific: +3.55%

Seek: +2.29%

7:25am:Shares in AJ Lucas are almost 20 per cent higher after Britain decided to allow shale gas exploration to resume but under tighter rules.

As we report here, that’s great news for Australian mining services outfit AJ Lucas, which has a big stake in Cuadrilla, the UK's only shale gas player.

7:21am:Consumer discretionary stocks are lower - 0.5 per cent - followed by gold and metals and mining - down 0.4 per cent. Energy stocks are off 0.3 per cent.

On the plus side, consumer staples are and financials are 0.3 per cent higher and telecomms have added 0.1 per cent.

7:15am:Stocks are flat early on. The All Ordinaries index is 2.3 points higher, or 0.1 per cent, to 4594.2, while the benchmark S&P/ASX200 is 3.1 points higher, or 0.1 per cent, to 4585.9.

6:58am:IAG shares could be in the spotlight today after the insurer finally sold off its troubled UK car insurance business, although the underwriter has taken a $240 million loss on the sale reflecting the knock-down prices for assets there.

‘‘It’s going to be a bumpy ride until we see some type of deal on the fiscal cliff,’’ said Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor Inc.

‘‘Speeches and speculation are the drivers of the market right now. I’m hopeful that we’ll see a resolution, but the politicians seem to be going a different tune.’’

US House Speaker John Boehner repeated his insistence that President Barack Obama’s budget proposal is ‘‘anything but’’ balanced and accused the president of being ‘‘not serious’’ about cutting spending.

Obama said the negotiations are ‘‘still a work in progress.’’ The deadlock in talks to avoid more than $600 billion in tax increases and spending cuts will start taking effect in January unless Congress averts them. Obama and Boehner were scheduled to meet late on Thursday (local time) at the White House.

So it remains a case of stay tuned.

6:41am: Local stocks are looking at a down start today thanks, apparently, to the continuing standoff over the US budget. More on that soon. For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key markets numbers:

SPI futures are 7 points lower at 4583

The $A is lower at $US1.0513

In the US, the S&P500 was 0.63% lower at 1419.45

In London, the FTSE100 rose 0.27% to 5929.61

China iron ore added $US1.40 to $US126.40 a metric tonne

Gold fell $US2.32 to $US1694.87 an ounce

WTI crude oil fell $US0.35 to $US86.42 a barrel

Reuters/Jefferies CRB index was flat at 295.19

6:38am: Good morning folks. Welcome to the Markets Live blog for Friday.

What a beautiful line all the way back to the beginning of June for the asx. Very few potholes along the way. The doomsayers are ecstatic with joy. In all probability they are consuming a little "bubbly" to celebrate how well things are holding up! Now I wouldn't be one to provoke controversy now would I ?Cheers

Commenter

Optimist

Location

Hi Australia

Date and time

December 14, 2012, 12:18PM

Sure you would. You are gloating at every opportunity.

Commenter

cranberry

Location

Date and time

December 14, 2012, 12:30PM

What controversy? The economy has deteriorated significantly since then. Why do you think interest rates are at emergency lows? Only doe eyed pollyannas long in this market.

Did you miss the Ten and LNC shorts?

Commenter

Allan

Location

Prahran

Date and time

December 14, 2012, 12:31PM

You're going to have to try harder to get comment of the day with that effort.

Commenter

4500

Location

The New Black

Date and time

December 14, 2012, 12:38PM

Good for you Opto, kick up your heels, but don't forget where you put your life-jacket.

Commenter

Catch 22

Location

Date and time

December 14, 2012, 12:50PM

Perhaps it is because they like Wayne Swan Allan what do you reckon? Now as I said before I wouldn't dream of writing anything controversial. Cheers

Commenter

Opto

Location

Hi to the opposition.

Date and time

December 14, 2012, 1:23PM

Well the banks have all put their rates down 20 basis points. There is no collusion here.They don't ring each other any more and ask "Hey , what do you think?" No need itis all done in the press. This can only mean one thing .They're all borrowing money from the same source at exactly the same rate.This is hocus pocus and time the watchdog kicked their house down.

Commenter

pest from the west

Location

Upper Lowood QLD

Date and time

December 14, 2012, 12:09PM

Hey Pest, ever seen a poodle kick down a mansion?

Commenter

Catch 22

Location

Date and time

December 14, 2012, 12:35PM

Anyone know why China went up 3% today?

Commenter

Jonaze

Location

Sydney

Date and time

December 14, 2012, 11:42AM

HSBC released its Flash PMI ,which is one measurement of the manufacturing sector in China. It edged up to 50.9. I believe that it is a 14-month high.

Commenter

maxwell_smart

Location

Date and time

December 14, 2012, 12:22PM

Another Grump,

Hope you're still holding to your SIR parcel mate, the pump has begun again !

Commenter

got brain

Location

Date and time

December 14, 2012, 11:21AM

No, took a quick profit yesterday and missed out on a bigger one today. I must admit I was bloody peeved at their extended trade halt and was looking to get rid of em. I should have learnt by now not to be emotional about stocks.

Commenter

Another Grump

Location

Melb

Date and time

December 14, 2012, 12:30PM

Can soemone explain why in the current economy and with all of Europes uncertainty the banks here are all up. We have a government and treasury that changes the budget outlook almost daily, we apparently have a housing crisis, the ov ervalued dollar is killing the balance of trades and business. And they still climb. It beggers belief. Perhaps they have found a way to make money on foreclosures !

Commenter

Another Grump

Location

Melb

Date and time

December 14, 2012, 11:08AM

Martin Ferguson was joking o/s that green factory jobs are hard to come by. According to the US Labor Bureau, Australian factories have had the worst productivity gains in the developed world since the 1990s and the last few years have been no exception. Maybe that's why we aren't getting any green manufacturing jobs Mr Ferguson? (American companies are moving factories back to the US.)

Meanwhile, Germany already gets a quarter of its electricity from renewables. The energy revolution is well and truly under way.

Commenter

Carch 22

Location

No laughing matter

Date and time

December 14, 2012, 10:33AM

"The problem of overinvestment, a key driver behind the unbalanced economy, is well recognised in and outside the country. Chinese leaders, including the newly anointed party boss Xi Jinping, vowed to steer the country away from addiction to investment.

That's what Roubini et al have been saying for over a couple of years now. GDP growth based on uneconomic property and infrastructure investment is a recipe for disaster. Ross Garnaut is right. The Chinese leadership knows it has to address the welfare of the population at large and that means improving services. As it is 500M Chinese cannot see a real doctor due to cost and lack of services.

Oh and the idea that rich Chinese are going to pour into Australia and send the residential property market to the moon is fanciful. Chinese have their own problems to deal with including how to support their two parents and four grandparents, a direct result of social engineering via the the one child policy.

Commenter

Allan

Location

Prahran

Date and time

December 14, 2012, 9:49AM

Straight back down Whats the point

Commenter

Jonaze

Location

Sydney

Date and time

December 14, 2012, 8:06AM

Hey c'mon Jonaze, its fun. Enjoy the rollercoaster. Only the truly romantic and hopefulls could believe it would stay above 4600.

Commenter

Another Grump

Location

Melb

Date and time

December 14, 2012, 8:15AM

Aren't you happy that the market has gone up over 200 points since mid Nov?

Then again, US finished down, and we are currently up! What's going on?! Must be rigged.

Commenter

cranberry

Location

Date and time

December 14, 2012, 8:53AM

re Grump... we all knew it couldn't last... was just thinking it might last for a day... ouch...